Compliance and Enforcement under MahaRERA

The Maharashtra Real Estate Regulatory Authority (MahaRERA) plays a pivotal role in regulating and promoting the real estate sector in Maharashtra. To ensure that the sector operates transparently, efficiently, and fairly, MahaRERA has established a robust framework for compliance and enforcement. This framework mandates stringent requirements for promoters and agents, implements rigorous audit and reporting mechanisms, and prescribes penalties and legal actions for non-compliance.

Compliance Requirements for Promoters and Agents

Compliance Requirements for Promoters

1. Project Registration: Promoters must register all real estate projects with MahaRERA before advertising or selling. This involves providing detailed information about the project, including its location, size, type, and timelines.

2. Disclosure of Information: Promoters are required to disclose comprehensive details about the project on the MahaRERA portal. This includes sanctioned plans, layout plans, specifications, approvals, and the status of various permissions.

3. Adherence to Approved Plans: Promoters must adhere to the approved plans and project specifications. Any changes to the plans require the consent of two-thirds of the allottees.

4. Quarterly Updates: Promoters must update the MahaRERA portal quarterly with the progress of the project, including construction status, approvals obtained, and any changes to the timelines.

5. Separate Bank Account: Promoters are mandated to maintain a separate escrow account for each project. At least 70% of the funds received from allottees must be deposited into this account, ensuring that the funds are used solely for the construction and land costs of the project.

6. Timely Possession: Promoters are responsible for completing the project and handing over possession to allottees within the stipulated timeline. Delays in possession must be compensated.

7. Title of Property: Promoters must have a clear and legal title of the property. Any encumbrances or legal issues must be disclosed to the allottees.

Compliance Requirements for Agents

1. Registration: Real estate agents must register with MahaRERA to operate legally. This involves providing personal and business details, past experience, and paying the requisite fee.

2. Fair Practices: Agents must conduct their business in a fair and transparent manner. They should not misrepresent any information about the project or the promoter.

3. Disclosure of Information: Agents must provide accurate and complete information to buyers about the project, including its status, approvals, and specifications.

4. Adherence to Regulations: Agents must comply with all MahaRERA regulations and ensure they only deal with registered projects and promoters.

5. Record Maintenance: Agents must maintain proper records of all transactions and dealings and must provide these records to MahaRERA upon request.

Audit and Reporting Mechanisms

To ensure compliance with the regulatory framework, MahaRERA has established robust audit and reporting mechanisms. These mechanisms help in monitoring the activities of promoters and agents and ensuring adherence to the prescribed standards.

Quarterly Progress Reports

Promoters are required to submit quarterly progress reports on the MahaRERA portal. These reports must include:

1. Construction Status: Details of the current stage of construction, along with photographs and descriptions of the work completed.
2. Financial Progress: Updates on the utilization of funds, including the amount spent on land acquisition, construction, and other project-related expenses.
3. Approval Status: Information on the status of various approvals and permissions required for the project.

Annual Audit

MahaRERA mandates an annual audit of the financial accounts of registered projects. This audit ensures that the funds collected from allottees are being used appropriately and that the project is progressing as per the approved plans and timelines. The audit report must be submitted to MahaRERA, and any discrepancies or issues must be addressed promptly.

Regular Inspections

MahaRERA conducts regular inspections of registered projects to verify compliance with the approved plans and regulations. These inspections help identify any deviations or violations and ensure that corrective actions are taken promptly.

Transparency and Disclosure

The MahaRERA portal provides a transparent platform where all stakeholders can access information about registered projects. This includes details about project approvals, timelines, financial status, and compliance reports. This transparency helps in building trust and accountability in the real estate sector.

Penalties and Legal Actions for Non-Compliance

MahaRERA has established a stringent regime for penalties and legal actions to deter non-compliance and ensure that promoters and agents adhere to the regulatory framework.

Penalties for Promoters

1. Non-Registration: Failure to register a project with MahaRERA can result in a penalty of up to 10% of the estimated project cost.

2. False Information: Providing false information or misleading details about the project can attract a penalty of up to 5% of the estimated project cost.

3. Delay in Possession: If a promoter fails to complete the project and hand over possession within the stipulated timeline, they must compensate the allottees with an interest rate prescribed by MahaRERA.

4. Non-Compliance with Orders: Failure to comply with orders or directions issued by MahaRERA can result in fines and, in severe cases, imprisonment for up to three years.

Penalties for Agents

1. Non-Registration: Agents operating without registration can face a penalty of up to Rs. 10,000 per day of default, which may extend to 5% of the total cost of the property sold.

2. Misrepresentation: Providing false or misleading information to buyers can attract a penalty of up to 5% of the total cost of the property.

3. Non-Compliance with Orders: Agents failing to comply with MahaRERA’s orders or directions can face fines and imprisonment for up to one year.

Legal Actions

In addition to monetary penalties, MahaRERA has the authority to take legal actions against non-compliant promoters and agents. This includes:

1. Revocation of Registration: MahaRERA can revoke the registration of a project or agent if they consistently fail to comply with the regulations or provide false information.

2. Blacklisting: Non-compliant promoters and agents can be blacklisted, preventing them from registering new projects or conducting business in the real estate sector.

3. Civil and Criminal Proceedings: MahaRERA can initiate civil and criminal proceedings against promoters and agents for severe violations, including fraud and misrepresentation.

Conclusion

Compliance and enforcement under MahaRERA are designed to create a transparent, accountable, and fair real estate market in Maharashtra. By mandating stringent compliance requirements for promoters and agents, implementing rigorous audit and reporting mechanisms, and prescribing severe penalties and legal actions for non-compliance, MahaRERA ensures that all stakeholders operate within the legal framework. This regulatory environment fosters trust and confidence among homebuyers and investors, promoting sustainable growth in the real estate sector. Through these measures, MahaRERA continues to play a crucial role in transforming Maharashtra’s real estate landscape and protecting the interests of all stakeholders.